VIENNA, Austria, (AP) – Crude futures edged higher Wednesday as OPEC’s decision last week to cut output appeared to be taking hold, though gains were limited ahead of weekly U.S. supply data expected to show an increase in the country’s inventories.
Light sweet crude for December delivery gained 9 cents to $59.44 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. December Brent at London’s ICE Futures exchange rose 23 cents to $60.09 a barrel.
Dow Jones Newswires, citing an industry source, reported that the United Arab Emirates is to cut November oil supplies by around 5 percent, in line with the Organization of Exporting Countries’ pledge to lower output by a total of 1.2 million barrels a day, an industry source said Wednesday.
The UAE is the second OPEC member to cut its supply, Dow Jones said, after a senior OPEC delegate said Monday that Saudi Arabia informed all its global oil customers that they will receive less oil in November.
Crude futures had fallen amid doubts about OPEC’s ability to implement the decision to cut daily production. But some traders believe the cartel’s intentions could nevertheless help to support prices around $60 a barrel.
“Participants seem to be focused more on near-term crude oil supplies, so with the early estimates for this week’s inventory reports calling for another rise in crude stocks, it is understandable that OPEC’s efforts have not gone far in changing perceptions,” said Mike Fitzpatrick at Fimat USA.
U.S. crude oil inventories are expected to grow for the fourth week in a row, possibly rising by 2.7 million barrels, according to a survey of analysts by Dow Jones Newswires. Distillates stocks, which include heating oil, will likely fall by 1.6 million barrels to 143.8 million barrels, the survey showed.
Heating oil futures were up more than a cent at $1.7070 a gallon on the Nymex, while gasoline futures fell one-third of a cent to $1.5345 a gallon. Natural gas futures dropped 8 cents to $7.010 per thousand cubic feet.
Good news came from Europe, where an agreement reached between the Ukrainian and Russian governments over natural gas prices and delivery meant that the continent will not have the same worries over reductions in Russian gas deliveries as it did last year.